Federal Tip Pooling Rule 

The new Federal rule that could broaden tip pooling to different employees does NOT apply to any business that takes a tip credit of any size, like a restaurant. If you are not paying your tipped employees the full minimum wage, then you are taking a tip credit. The proposed new rules apply to states with no tip credit or businesses that pay all their employees minimum wage or higher (takeout stand with a tip jar, etc.) There has been some question, as to whether this rule would apply in Maine at all, even for businesses that pay the full minimum wage, due to the way our statutes on tipped employees are written.

Now the verdict is in, Scott Cotnoir, the Acting Director of the Maine Department of LaborWage & Hour Division, says that Maine law prohibits the sharing of tips with back of the house employees, regardless of the Federal provision.

The three items noted in statute are as follows. They are all located in Title 26, under minimum wage laws-

1. The tips received by a service employee become the property of the employee and may not be shared with the employer.
2. That all tips received by the affected employee must be retained by the employee, except for a valid tip pooling arrangement limited to employees who customarily and regularly receive tips in accordance with subsection
3. Tip pooling.  This section may not be construed to prohibit an employer from establishing a valid tip pooling arrangement among service employees that is consistent with the federal Fair Labor Standards Act and regulations made pursuant to that Act.

Source: Maine Hospitality Legislative Report, May 10, 2018 Issue, A publication of Maine Restaurant and Innkeepers Associations
Please Send comments or questions to greg@mainerestaurant.com or greg@maineinns.com.